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AC 07-01-2022Page 1 City of Cupertino Audit Committee Regular Meeting Minutes July 1, 2022 CALL TO ORDER At 4:00 p.m., Chair Moore called the regular meeting to order. This was a teleconference meeting with no physical location. ROLL CALL Committee Members Present: Chair Kitty Moore, Vice Chair Angela Chen, Mayor Darcy Paul, Committeemember Hammer City Staff Present: Dianne Thompson, Kristina Alfaro, Thomas Leung, Beth Viajar Absent: Committeemember Song Guests: ORDERS OF THE DAY ORAL COMMUNICATIONS NEW BUSINESS 6. Consider the Monthly Treasurer's Report for May 2022 Leung provided an overview of the report. No public comment. Chair Moore requested to have explanations of the journal transfer included in the staff report and a link to what each fund is. Chair Moore noted, in particular, that there are three items under Special Revenue Funds – the Storm Drain Improvement, Storm Drain AB 1600, and the Environmental Management Clean Creek Storm Drain Fund— that she could not locate an explanation for and that one was missing in the budget book. Chair Moore also noted that there is a Tree Fund, and she does not know what it is for and does the $138k mean that there is potential to increase tree canopy in the city. Vice Chair Chen moved to approve. Committeemember Hammer seconded. Motion carried unanimously by all members present. Committeemember Song absent. 7. Consider an update on the FY 2021-22 Audit and AUP Engagements Leung provided an update on the audit and AUP engagements. He noted that Korach mentioned in December that staff would be conducting an RFP for external audit services in July or August of 2022. Chair Moore asked if the subcommittee needs to be formed now. Leung confirmed the subcommittee will be formed either in July or August. Committeemember Hammer asked if it would consist of members from this committee. Leung confirmed. Chair Moore asked who made up the previous subcommittee. Leung noted it included the Chair, one committee member, and the Finance Manager. Chair Moore asked if there is a historical preference to include councilmembers. Director Alfaro noted that the committee generally nominates the Page 2 subcommittee members. There are no limiting rules other than that the individual has to be on Audit Committee. 8. Consider an update on Budget Format Review Leung noted that staff has gathered data and will present the information at the next meeting. He added that any input from the budget format review subcommittee will be brought to an audit committee meeting. Chair Moore noted that she has a late addition requesting that the previous budget format comments be included when we are looking at this item in the future. Chair Moore noted that the subcommittee needs to get together and provide comments so that they can be available at the July meeting. 9. Consider the Audit Committee 2022 Schedule and Work Plan Leung shared the 2022 schedule and work plan and welcomed comments. Chair Moore wanted to know how accounting for special projects is handled as carryovers have designated monies for specific projects and she is unsure how they are tracked. Leung noted that staff will look into that and will bring an update on Special Revenue Funds as well as a demonstration of how to use OpenGov to view the budget versus actuals for special projects. Chair Moore wanted staff to explain the Development Impact Fee report on the budget webpage and if there is a way to track those fees. Mayor Paul noted it would be good to get clarity on the Park Dedication Fee and BMR Housing Mitigation Fee and is not sure what form of deliverable it would be and whether it is within the scope of the Audit Committee. Chair Moore noted that the grants could be included in the budget format review and asked if we could have the HUD audit as an update item moving forward. Acting City Manager Thompson noted that it may not be an audit committee role, and more about the staff providing information as a check-in with Council as needed. Acting City Manager Thompson would check with finance staff and notes that grants are spread across the city. Director Alfaro noted that Council did fund $100,000 contracts in administrative services and worked with the City Manager and Department Heads to develop a centralized process and policy and procedures around grants. She added that the HUD and CDTFA audit would not fall within the current duties and responsibilities of the audit committee because those are specific to the internal and external auditor, so there needs to be an action to go back and update the Audit Committee code if that was a report the committee wants to receive. Mayor Paul asked if we are anticipating an internal review process that would generate a written report deliverable and why wouldn't the Audit Committee be a part of the process. Director Alfaro noted that it is not considered an internal audit as it is done by an external agency. Chair Moore noted that they should start with the budget format mission in July and slide the fund balance policy and OpenGov to the August meeting. She would also like the agenda packet to include previous comments that were collected in February and the last couple of years of budget format comments. Mayor Paul noted that the Commissioners and Committees handbook is being revised and believes that Chair Moore has the unilateral right to add items, and two committee members can ask for items to be placed. Page 3 OLD BUSINESS None. STAFF AND COMMITTEE REPORTS None. FUTURE AGENDA SETTING Mayor Paul asked if the July meeting could be moved to 2:30pm. Present members noted that they are available. ADJOURNMENT The meeting adjourned at 5:15 p.m. Recording Secretary: Janet Liang, Administrative Assistant